23. REPORT NO. 2 FROM THE COMMISSION TO THE COUNCIL ON
THE APPLICATION OF THE EARLY MARKETING AND THE CALF PROCESSING
SCHEMES IN THE BEEF SECTOR, (10934/97); AND A PROPOSAL FOR A COUNCIL
REGULATION AMENDING REGULATION NO. 805/68 ON THE COMMON ORGANISATION
IN THE MARKET IN BEEF AND VEAL

Letter from Lord Tordoff, Chairman of the Committee,
to Lord Donoughue, Minister for Farming and the Food Industry,
Ministry of Agriculture, Fisheries and Food

At a meeting on Wednesday of last week, Sub-Committee D of
the European Communities Committee considered the above proposal
and lifted its scrutiny reserve.

The Sub-Committee agrees with Her Majesty's Government that
CPAS is a far more effective scheme than EMS and is disappointed
that the Commission's second report has failed to recognise this.
The Sub-Committee does not understand how the Commission's analysis
can have so dramatically altered in the space of months. The Sub-Committee
urges the Government to continue pressing for the Community-wide
application of CPAS.

Of immediate concern is the potential shortage of domestic
beef. The Sub-Committee would be grateful to know how the Government
hopes to prevent this eventuality and what negotiations with Community
institutions are in hand.

19 November 1997

Letter from Lord Donoughue, Minister for Farming and
the Food Industry, to Lord Tordoff, Chairman of the Committee

Thank you for your letter of 19 November 1997 informing me
that the scrutiny reserve on the above proposal has now been lifted.

I can confirm that we will continue to press for the Community
wide application of the Calf Processing Premium Scheme (CPAS).
Unfortunately, however, this is not a realistic goal as most Member
States favour the Early Marketing Scheme.

You raised concerns over a potential shortage of domestic
beef later in the year. Current estimates suggest that supply
of British beef will be about 3 per cent below last year's figure.
This is based on the assumption that a proportion of calves entering
the CPAS would otherwise have been fattened for beef, and the
first of those calves would have come onto the market late this
year. However, it is unlikely that there will be any shortage
whilst the strong pound attracts beef from other Member States
and the Republic of Ireland continues to have problems accessing
Third Country markets.

It may also be worth noting that we are still receiving tenders
for intervention purchases and further purchases are expected
in the coming year. This would suggest that there will continue
to be a surplus of beef on the domestic market.